What Would You Do With A $434,712 Tax Refund Check?

Coming into accidental money can be a heady thing — but while some of you might get a little nutty and go out and spend that “free” cash, we know others would return it. A Cleveland waitress spent her mistaken money only in her daydreams, musing about what she’d do with $434,712 from the Internal Revenue Service.

Ginny filed her tax return and patiently awaited a refund of $754, money she needed for things like fixing her car. But lo and behold, a whopping $434,712 landed in her hands, courtesy of the IRS.

“I have many best friends now, let me tell you,” she told USA Today while working at the restaurant she’s been working at for almost 20 years.

Some of her friends told her to cash it, and some said not to, but Ginny knew what would happen if she gave in to her fantasies of going on vacation and traveling the world with her family.

“They’ll put me in Alactraz, waiting on the night shift at Alcatraz,” she said. “They’ll reopen the place.”

Instead, she returned the check to the IRS office, while her friends lent her money until her real refund check comes in a few weeks. Perhaps the IRS will add in a few extra bucks as a finder’s fee, eh?

Ginny seems to have a good attitude about it all, in the end.

“It made a great story, didn’t it,” she said. “We’ll get many miles and many years out of this story of Grandma being queen for a day, rich for a day.”

*Thanks for the tip, Ray!

Cleveland waitress receives huge IRS refund check by mistake [USA Today]


Edit Your Comment

  1. Torgonius wants an edit button says:

    I’d screw with the Mafia before I screwed with the IRS.

  2. Bsamm09 says:

    Unless it was from a NOL carry-back, I’d get a better CPA if he didn’t inform me that I was overpaying the Fed by a half a million.

  3. Loias supports harsher punishments against corporations says:

    Shouldn’t have returned it. Keep it in the bank for the interest, then wait quietly until they ask for it back. In addition to getting interest on it, banks would be crawling over each other for your business, so you’d get breaks on interest rates as well.

    • Important Business Man (Formerly Will Print T-shirts For Food) says:

      What would happen when a deposit that large is reported to the IRS then? I’m not sure how big money transactions work…

      • CubeRat says:

        Your name, and probably all data about you, gets it’s own case worker at the Treasury, the FBI and probably a lot of other government folks.

        You start seeing strange vans parked outside your home; you come home an wonder did you really leave your closet that neat? You get friend requests from lots of new people. (watched NCIS last night)

    • Vox Republica says:

      Might be skirting the line of affirmative duty to report, but all in all, this is easily the smartest choice insofar as keeping the money secure: I would trust a federally-insured deposit account (or accounts, if one is paranoid) far more than I would trust remitting an erroneous payment either via mail or parcel carrier. Deposit, let the IRS know about the overpayment in writing, and wait for them to take affirmative steps so that the risks regarding money transfers are weighing on their heads, not yours.

      • RandomHookup says:

        Returning this check via mail isn’t that risky. If it gets lost, it’s not like someone can cash it at the corner store … it’s too big and it has all kinds of tracking info on it. If it disappears into thin air, the IRS cancels payment and life goes on.

        I would only send it back if someone specific were expecting it, but sending a wire transfer after depositing the money would be riskier than mailing back the check.

    • energynotsaved says:

      Would the IRS then tax her for the nearly half million wind fall as well as the interest earned? Seems likely that they would screw with her.

      • Loias supports harsher punishments against corporations says:

        Its a tax refund – why would she be taxed for money from being overtaxed?

        • The Cupcake Nazi says:

          That would be funny,…except that happens. A lot of states are now considering your tax refund as additional taxable income. Yes, that means they are taxing you on money you already PAID the taxes on.

          • RandomHookup says:

            State tax refunds have always been taxable at the federal level for those who claimed a deduction for state taxes in the previous year. I’m guessing that is what states are doing as well, not taxing a refund of money you paid into the system.

          • StarKillerX says:

            I’m not a big fan of taxes but this is incorrect, the money you get back from the Fed is taxable at the state level simply because it’s no different then the income that wasn’t taken in taxes since as far as I know all states allow you to deduct money paid in federal taxes from your taxable income, so a return from the fed basically just returns money to that amount.

            For example if you made $50k and paid $10k in federal tax, so you deduct that 10k from the 50k to leave $40k, but if you get $2k back from the fed you only get to deduct the $8k you paid as opposed to what was withheld.

            If the deduction was based off withholdings alone, one could easily game their state taxes by increasing their federal withholdings.

            • The Cupcake Nazi says:

              Incorrect. According to what I have seen here, it works like this:

              Make 50k.

              Pay whatever taxes your witholding amounts automatically deduct through your employer for both state and federal taxes.

              Receive refund for the difference from both sides.

              Be forced to report that refund as additional taxable income on your state taxes the next year. So, say you got $2K back, you are now paying taxes on $52K instead of 50K, effectively.

              • RvLeshrac says:

                Except that’s not true, and you completely failed at reading the previous post.

                When you get a tax REFUND, that money is, get this, THE UNTAXED MONEY THAT YOU PAID TO THE GOVERNMENT. Since that money WAS NOT TAXED, it is UNTAXED income. The State is then TAXING your UNTAXED $2,000, which was NOT TAXED because you DID NOT HAVE THE MONEY TO TAX.

                • Yorick says:

                  This makes no sense. Unless someone changed the rules without telling me, both federal and state payroll withholdings are based on your gross pay. The state is not taking its piece off the net pay post-federal withholdings. That would be an accounting nightmare.

            • OnePumpChump says:

              The Fed is the Federal Reserve, not the Federal Government.

              The Feds is the Federal Government.

    • sirwired says:

      Banks do not “crawl all over each other” for a puny half-million one-time deposit, especially one that’s going to go into an account that can be emptied at any time. The best she could get would be ~1%.

      • ajaxd says:

        You do get free checks by overnight shipping and a special customer support line (at Citibank). That’s about it.

    • Rob says:

      Plus the IRS interest and penalty charges will more than wipe out any insignificant interest earned.

  4. Lucky225 says:

    Step 1 Deposit into account see if it clears
    Step 2 Withdrawl amount as a cashier’s check and close checking account
    Step 3 ???
    Step 4 Profit.

    • Blueskylaw says:

      5). Enter suspended animation until statute of limitations expires 100 years from now only to awaken to the fact that we no longer use money but instead live by what PayPal decides to give us from their good graces after their merger with UniCorp made them the only employer on the face of this earth.

      • Loias supports harsher punishments against corporations says:

        Reminds me of an episode of Star Trek: The Next Generation, where a bunch of people were found in suspended animation floating in space.

    • Loias supports harsher punishments against corporations says:

      Step 3 is leave the country, change name, and start a new life somewhere without reciprocal extradition agreements with the U.S.

      • Torgonius wants an edit button says:

        Honduras used tobe the country of choice for this, but I haven’t looked into it recently.

        I know it used to be if you dropped $50k into a national bank account there, you would be granted citizenship, and there was no extradition. That may have changed during the recent governmental turmoil, though.

        • StarKillerX says:

          But the question becomes what would be your standard of living with that amount of money?

          Most people in the US have no clue what life is like in the rest of the world. Our lives have become so pampered that even trips to other developed countries don’t meet the level of comfort that we in the US have come to expect.

      • Fubish says: I don't know anything about it, but it seems to me... says:

        Not really worth it for $434,712. Wouldn’t take you very far unless you moved to Niger.

    • J. Cohen says:

      Step 5: get sued by IRS
      Step 6: have tax leins placed on everything you own down to your last pair of socks
      Step 7: have your wages garnished
      Step 8: spend some quality time at a federal pound-me-in-the-___ prison

      • StarKillerX says:

        “Step 8: spend some quality time at a federal pound-me-in-the-___ prison”

        But maybe that is what they meant by “Step 4 Profit?”

      • FredKlein says:

        Step 5: get sued by IRS

        Sued for what? Taking the money they GAVE me? (Well, ‘me’ hypothetically.)

        If I hand someone a $100 bill, can I sue them for stealing it from me? Of course not- I GAVE them it.

    • FatLynn says:

      Step 3: Fly to Bermuda.

  5. Blueskylaw says:

    Ginny returned the wayward refund and was slapped with interest owed and a late return fee. When asked for a comment, an Income Reduction Specialist blamed the error on a stray computer “code” and mused that she’s lucky we don’t put her on the no-fly list.

  6. homehome says:

    If I knew it wasn’t mine? Probably a high yield savings or so account, something where I can get something back quick and when it’s time for me to return it I can easily get it back and return it.

  7. That guy. says:

    How implausable would it be for her to have cashed the check, set up an off shore bank account, transfered it, and left the country for one that has no extradition treaty?

    • StarKillerX says:

      For $434,712?

      Now if someone accidentally deposited the $386 million from the Mega Millions, sure I’d be out of the country as fast as I could get it transfered, but for this amount it would seem more hassle then it’s worth, and it’s not like you’ll live like a king on your vast wealth for the rest of your life.

      • That guy. says:

        I realized that after I posted lol. Then again, if you move to a particularly poor country, that money might set you up well enough.

  8. Torgonius wants an edit button says:

    Upon further reflection, and if I was single so that I wouldn’t potentially mess up other peoples’ finances…

    I’d make the maxmimum allowable campaign donations to Dear Leader, my 2 corrupt, imcompetent Democrat senators, my ineffective Republican congressman, the governor, my state reps and all their opposition in the upcoming elections.

    Then when the IRS comes calling, I just make an extra, ‘special’ bri.. donation to my congresscritters to make the IRS realize that they didn’t make an error.

  9. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    If I received a paper check like that from the IRS, I’d visit the local IRS office, and find someone to take it back. I definitely wouldn’t cash it, put it into an account, or anything of the sort. I can’t even imagine the absolute crapstorm the IRS could rain down upon someone who would knowingly cash a check of this size knowing it wasn’t theirs. **shudders**

  10. Alan says:

    I would cash it and place it in a high yield savings account and make sure to send a certified letter to the IRS notifing them of the mistake and ask them how they want to fix it. Should be able to get a few hundred in interest before it all clears up.

    • Conformist138 says:

      Just depositing the check immediately removes the money from the IRS and, if you know the check is a mistake, that is considered theft.

      Personally, I might try my luck at the other way around: send a certified letter explaining the situation and requesting a replacement check within 30 days or I would consider the check I have as valid. THEN deposit the money if there isn’t any response for a month. At least that way, even though I could still risk getting into trouble, odds are slim that charges would be pressed against me since it could be said I made a good faith effort to fix the problem and I was ignored. Granted, fighting the IRS is probably the stupidest, most ill-advised battle a person could consider. Better to steer clear of it entirely.

  11. RiverStyX says:

    Buy consumerist.com and turn it into a raunchy hardcore pornography production studio.

  12. Starrion says:

    Sir! We just discovered that we mistakenly sent a refund of $434,712 to someone. They kept the money!

    Well, send a team over and audit them. Tell the team: no lube.

  13. atomoverride says:

    shes a waitress. cash the check, and fly to another country. live in paris.

  14. chargernj says:

    I would pay off my student loans while depositing the rest in some sort of interest bearing account until the IRS came looking for it. It would be fun to watch the Department of Education and the IRS fight over it.

    • StarKillerX says:

      But would it be fun watching them fight over it while you sit in jail?

      • StarKillerX says:

        Sorry, for the double post. When I hit submit the first time I got an error page so I reloaded this page twice and the message didn’t appear so I entered it again.

    • StarKillerX says:

      But would it be fun watching them fight over it while you sit in jail?

      • chargernj says:

        Nah I wouldn’t go to jail. I said I would put the rest in an interest bearing account, when the IRS came looking for it they would get it back minus what I paid towards my student loans. Sure I would still owe the IRS, but no so much that they would put me in jail. After all they want their money, putting me in jail won’t get them their money, letting me make a deal to pay it back over time would.

  15. Tank Fuzzbutt says:

    I’ll tell you what I’d do if the IRS sent me a refund that big. I’d do to chicks at once, that’s what I’d do.

    • Pagan wants a +1 button says:

      You would do what to chicks?

    • DaveWW says:

      It takes a million to do two chicks… for $457k, you only get one, almost-average looking chick.

      And you’d have to do her before you go to the federal pound-me-in-the-___ prison.

  16. JohnDeere says:

    id put it in an interest bearing account until it was asked for.

  17. Lyn Torden says:

    I would have at least taken a picture of the check just to prove to people that it really happened.

  18. Lyn Torden says:

    “The IRS said sometimes mistakes like this happen, but it happens less often as more people file their taxes electronically.”

    Hey IRS … I’m ready and willing to file electronically … as soon as you provide a means to do so SECURELY … which means encrypting the data and keeping in encrypted until it reaches YOUR computers.

  19. Nigerian prince looking for business partner says:

    It’s best to put that kind of money into savings and don’t cash it. These types of things always come back to haunt you.

    Many years ago, I wound up with several thousand dollars in GI Bill money that I wasn’t supposed to get. I tried and tried to return it — bursar’s office, VA office, financial aid, VA regional center, state military affair’s office, and while everyone agreed that I wasn’t entitled to it, they would just send me somewhere else in a giant loop. Everyone passed the buck.

    About five years later, the VA finally realized their mistake and wanted the money back.

  20. fsnuffer says:

    I would fire the IRS clerk who approved this check when all that was documented on her form as a refund was $774. Only in the US government do you consider $447K a rounding error. I wonder how many other checks like this were sent out?

  21. Budala says:

    IRS doesn’t make mistakes, the check was legit. Like somebody from the government would ever want to actually do any work to find out where the money got lost.

  22. Budala says:

    IRS doesn’t make mistakes, the check was legit. Like somebody from the government would ever want to actually do any work to find out where the money got lost.

  23. Warren - aka The Piddler on the Roof says:

    I’d buy the most expensive meal ever!

    “Yeah, I’d like 6,000 chicken fajitas, please? Yeah, 6,000 chicken fajitas.”
    “And a supersized McBiscuit, please?”

  24. soj4life says:

    I’ll just put it into a money market account and wait for them to either cancel the check or contact me. I would not spend it until the account went dormant and even then I would wait.

  25. ferd says:

    I would put it in a savings account, write them a certified letter and wait for instructions on how to return it. Given the IRS beuracracy I might make a few dollars off of it before they responded.

  26. dush says:

    Returned the check? You put that in the bank, get interest on it and spend none of it.
    When the IRS comes calling you hand over their money.

  27. JJFIII says:

    Funny how many people say all these things when the errors are in their favor, but switch the script and tell us what kind of uproar they would have if instead of a refund she was told she owed money?
    The response should be the same if you are an honest person. ” I am sorry IRS, there appears to be a mistake on my refund. I was expecting $400 and you sent $400k. Would you like me to send the check back to you, or cash the check and send the amount after my refund back?”
    The fact that people discuss earning interest, moving to a country with no treaties, or hiding it shows their true colors. This is similar to the age old question that the 70 year old man asked the 20 year old girl, ” Would you fuck me for a million dollars?” ” Her reply ” yes”. He says, ” Would you fuck me for $10?” She says, ” what kind of girl do you think I am?”. He says, ” we have already established that, now we are just negotiating the price.”

  28. 2 Replies says:

    Sad thing is, if the mistake were reversed… the IRS would likely do nothing about it. :-/